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Present Use Value Deferment - Agriculture, Horticulture, Forestry

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Commercial agriculture, horticulture, and forest tracts in Mecklenburg County have been declining in the face of population growth and development. Fields and woodlands have been displaced by new residential neighborhoods, retail establishments, and office complexes. As a result, the market value of the remaining properties have increased. The good news is that you, as a commercial producer of agricultural, horticultural, or forest products, may be eligible for deferral of a portion of your local property taxes. North Carolina allows eligible producers to apply for tax assessment on the basis of present use, rather than full market value. This difference in taxes can be deferred (i.e., postponed) until such time as the property is no longer employed in commercial agricultural, horticultural, or forest production.

How do you know if your property is eligible? If you can answer yes to the following questions, you may call the Mecklenburg County Real Property Appraisal Division at (704) 336-6348 to discuss further.

You could qualify for an agriculture tax deferment if you:1. Have held title to your property for the past three years,2. Have at least 10 acres in commercial agricultural production which can not include a home or excess woodland,3. And you must have filed a Schedule 1040F with the IRS declaring an income of $1000 for a 10 acre tract or $65 an acre for each acre over ten acres for the last three years. *whichever is greater

You could qualify for a horticulture tax deferment if you:1. Have held title to your property for the past three years,2. Have at least 5 acres in commercial horticultural production which cannot include a home or excess woodland,3. And you must have filed an income of $1000 for a 5 acre tract and $65 an acre for each acre over five acres for the last three years.

You could qualify for a forest tax deferment if you:1. Have held title to your property for the past four years,2. Have at least 20 acres in commercial timber production which cannot include a home or open fields,3. And you must have an active forest management plan which specifies that species of your commercial timber, the growth, harvest, infestation spraying, harvest time-frames of your species, replanting expectations, any thinning needed, and any other care needed for the property maintenance of your commercial timber. This plan must be followed in order to confirm your intentions of commercial timber production.

Once you are granted a Present Use Valuation for your property as a qualifying owner, you can defer property taxes annually. Applications must be filed between January 1st thru January 31st of the effective tax year. The value of the qualifying property is assessed as follows: $390 an acre for commercial agricultural land, $1,120 an acre for commercial horticultural land, and $280 an acre for commercial timber land.

At such time as the property ceases to qualify, deferred taxes for the current year and three prior years, plus applicable interest, become due and payable. Owners are required to notify the Assessor’s Office when such disqualification occurs to avoid possible penalties.

These programs are for individuals actively engaged in commercial production for an extended period of time. For example, an owner whose property was in commercial production for 20 years before disqualification would be liable for deferred taxes and interest for the current and three previous years. However, there would be no recapture of the other sixteen years of deferred taxes. This allows producers to continue in operation without the burden of property values inflated by development.